3AC Legal Drama: Zhu’s Affidavit Throws Shade on Teneo’s Claims

Unpacking Zhu’s Bold Affidavit

In a twist that’s more dramatic than a season finale, Zhu personally delivered an affidavit on August 19, which claims that Teneo, the advisory firm tangled up in the liquidation of Three Arrows Capital (3AC), hasn’t quite been honest. The affidavit contends that Teneo provided an incomplete version of events to the Singapore court, which greenlit their request for 3AC records just days later.

The Liquidation Saga

Teneo was given the Herculean task of liquidating 3AC assets—quite the job considering the court’s ruling in the British Virgin Islands and the move of the Singapore-based fund’s registration. As 3AC announced plans to transfer its headquarters to the sunnier climes of Dubai, the stakes just continued to rise.

Claims of Misrepresentation

Zhu doesn’t hold back in calling out Teneo on its supposed misrepresentation of the operational relationships between 3AC and its related entities. In his affidavit, he claimed Teneo has been playing it fast and loose with the timeline.

• For example: Three Arrows Capital Pte Ltd (TACPL) was registered in Singapore until July 31, 2021.
• What happened next? TACPL was replaced by ThreeAC Ltd in the British Virgin Islands on September 1 as manager of the master fund and its feeder funds.

The Fine Print and Potential Consequences

With this structure in place, Zhu warned that TACPL might not have everything Teneo is asking for. According to him, this couldn’t just lead to awkward silences in court but could trigger “potentially draconian consequences” that reach all the way up to fines and imprisonment for TACPL officers if they fall short on providing the required information.

Teneo’s Response: Not Backing Down

Teneo, not one to take criticism lying down, responded to Zhu’s affidavit by outright rejecting his claims. Their statement was as firm as a well-structured spreadsheet: “The joint liquidators strongly disagree with the positions set out in Su Zhu’s affidavit.” They expressed hopes that the parties involved would eventually provide the complete records needed to carry out their responsibilities. This just goes to show how everyone involved has their work cut out for them.

The Ripple Effect of 3AC’s Demise

The implosion of 3AC is no small matter. With debts climbing towards $3 billion, the fallout has created waves throughout the financial industry. It’s a reminder of just how quickly fortunes can change and how a mountain of debt can turn into an avalanche.